[Edaily Reporter Kim Kyung-eun ] SamsungElectroMechanics(009150)has signed a 360.5 billion won contract with a global memory chip manufacturer to supply semiconductor substrates, leading to analysis that the shortage of semiconductor substrates is spreading. It is assessed that the supply shortage, which had previously been concentrated on ABF substrates used in high-performance semiconductors, is now expanding to BT substrates used in memory semiconductors.

Kwon Min-kyu, an analyst at KIWOOM Securities, stated in a report on the 20th, “The key takeaway from SamsungElectroMechanics’ announcement is that the supply shortage is spreading from FC-BGA (ABF substrates) to BGA (BT substrates),” adding, “This signals that the company has entered a phase of earnings growth characterized by simultaneous increases in volume and prices.”

SamsungElectroMechanics announced the previous day that it had signed a semiconductor substrate supply contract worth 360.5 billion won with a global memory manufacturer. KIWOOM Securities assessed that this contract pertains to next year’s supply volume of BGA (BT substrates) for memory chips. The firm explained that, as demand for memory semiconductors surges, the client has signed an annual supply contract—an unusual move—to secure a stable supply of substrates.

BT substrate supply capacity is failing to keep pace with the rate of demand growth. While global substrate manufacturers are actively expanding production capacity for highly profitable ABF substrates, they remain relatively reluctant to increase BT substrate capacity. Meanwhile, demand for BT substrates is growing rapidly as their applications expand beyond memory semiconductors to include general-purpose servers, smartphones, and automobiles.

According to KIWOOM Securities, ABF substrate production capacity is expected to more than double by 2028 based on global shipment volumes. In contrast, the growth rate of BT substrate production capacity is projected to remain in the mid-10% range. Considering that the current utilization rates of global BT substrate manufacturers have already reached the mid-80% range, there is a high likelihood that supply shortages will intensify starting next year.

Researcher Kwon explained, “Given the expansion of memory production and rising demand, the pace of expansion in BT substrate production capacity is extremely slow,” adding, “The environment is such that a supply shortage is inevitable in 2027–2028.” He further predicted, “Starting with the contract with SamsungElectroMechanics, other BT substrate manufacturers are likely to follow suit with long-term supply agreements (LTAs).”

The BT substrate supply shortage is expected to strengthen the pricing power of companies across the sector. In particular, DaeduckElectronics(353200)and SIMMTECH Co., Ltd.(222800), with high BT substrate revenue exposure of 84% and 72%, respectively, are expected to see significant earnings improvements due to price hikes. KIWOOM Securities has designated these two companies as top picks in the sector.

Analyst Kwon stated, “Price increases resulting from the BT substrate supply shortage will serve as the basis for upward revisions to earnings estimates for these companies in the fourth quarter of this year and next year,” adding, “We expect BT substrate manufacturers to post steep earnings growth driven by these price increases.”